Tanner Curtis | Kalamazoo GazetteAn abandoned house at 901 Vanzee St. in Kalamazoo. When looking for abandoned houses, the Community Planning and Development office often looks for exterior damage.

Blighted housing -- By the city's definition, an abandoned residential structure that has been for at least 30 days both unoccupied and at least one of the following: is open to casual entry; has one or more windows boarded; has utilities disconnected; has been declared a dangerous building by the city of Kalamazoo's code of ordinances; is in violation of the city's housing code; is the subject of more than one year's worth of debt to the city; or is apparent to the public that the structure is unoccupied.

KALAMAZOO -- The number of houses in the city of Kalamazoo that are considered blighted has shot up -- from about 212 in July 2008 to about 250 currently.

At the same time, the demand among investors who were previously active in buying and fixing up those properties has plummeted, city officials say. And the means to change those dynamics is scarce.

Federal funding that has been used to help the city of Kalamazoo refurbish abandoned, boarded-up and often-dangerous structures and get them back on the tax rolls has been tougher to come by.

And while the city has favored refurbishing such properties or selling them to investors -- either of which would bring them back onto the tax rolls -- simple economics is fighting the effort and pushing the city to a bottom-line solution, tearing down more properties.

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"Yeah, the strategy's changed," said Kenn Hartmann, head of the city of Kalamazoo's anti-blight team. "We were going to fix any that needed to be fixed. ... We were going to over-invest (take a loss for the sake of getting the property back to life)."

The new strategy is to turn blighted houses into cleared lots and to sell them to investors or adjacent-property owners to get them back on the tax rolls.

"We'll get the money back over the next 20 years -- maybe," Hartmann said of that strategy.

The trouble with blight

Areas with blighted houses are bad for business and bad for the quality of life. They are a breeding ground for crime and are a burden on law enforcement, says Kalamazoo Department of Public Safety's Sgt. Joe Humphries.

The broken-window theory applies, he said.

Once the first window is broken in an abandoned or condemned house, the others quickly follow, and blight spreads quickly, said Humphries.

"The bottom line is, when that happens, crime rises," he said.

Hartmann estimates the number of vacant and blighted properties, before the city started officially tracking them, was at a peak just before 2003. But he said, "We have probably now surpassed that number present in 2003."

Hartmann estimates that a decade ago, there may have been about 100 at any one time.
"The economy was still pretty good," he said.

Now 100 houses await a bulldozer, with surely more to come. And the anti-blight team expects to have 269 open cases by the end of 2009.

Supply up, demand down

The effort to reduce the number of blighted residences in Kalamazoo is being exacerbated by ongoing problems in the housing markets, particularly growth in the number of residential foreclosures, city officials say.

In June, there were 914 property foreclosure filings in Kalamazoo County, according to foreclosure-listing service RealtyTrac Inc. In June 2005, there were 11.

Although many blighted and abandoned houses are in foreclosure and a majority are condemned, the problem isn't that foreclosed homes are turning into blighted houses, anti-blight officials said. A higher volume of foreclosed houses is luring away investors who otherwise would have bought them from the city's blight list, they say.

"Our investor pool has gone almost to zero," Hartmann said.

A house in or near foreclosure is much more attractive to the average investor, he said. Most haven't been sitting vacant for years and are either occupancy-ready or very close, Hartmann said.

In an effort to wrestle down the number of foreclosures this year, the city and Kalamazoo County have become proactive in buying up foreclosed properties. The city recently purchased 64 tax-foreclosed properties, five times the number it typically buys annually in a state-tax foreclosure sale. Funding for that was the result of a federal grant. With the purchases, the city also paid $139,000 to cover taxes owed to the state and wrote off property taxes owed to the city.

Recently, Kalamazoo County approved the creation of a land bank, which would have the authority to manage and sell many of the properties that have fallen into foreclosure. Hartmann said that should slow the spread of blight that results from foreclosures.

Help from the government

According to the U.S. Department of Housing and Urban Development, the city of Kalamazoo received $1.7 million to help manage blight through an initial round of Neighborhood Stabilization Program grants, issued in early 2009. A timetable for a second round, in which the city is asking for another $15 million, has not been locked down.

That additional federal funding is expected to help the city demolish 100 blighted homes in the next 12 months, at a cost of about $7,000 per house, Hartmann said. That's $700,000 to knock down blighted buildings, many of which have already seen some investment from the city; such things as new roofs, windows and siding. But the total renovation of a blighted house is typically a big undertaking.

The high cost of fixing up

On a damp Wednesday in late July, Hartmann and Rick Suwarsky, another member of the city's three-person anti-blight team, inspected some of the city's abandoned residential structures.

The condition of the houses varies, although all have fallen victim to neglect and often poor workmanship. Windows are broken, gang graffiti covers walls, animals have died and are rotting. A house at the end of Roskam Court is nearly hidden by surrounding trees, weeds and roots as nature mounts its slow, messy takeover.

The cost for completely renovating a blighted house is $60 to $80 per square foot, Hartmann estimated. While standing in a condemned 1,400 square-foot house on Vanzee Street, Hartmann pointed out that, by his rule of thumb, a complete renovation of that structure would cost $84,000 to $112,000.

But he said, "There's not a house on this street that somebody would pay $84,000 for."
Individual frustrations

Chuck McGhee has been renovating a blighted house on the city's north side for two years. He paid a church $4,000 for the house with an attached building. The latter was once used as a church.

McGhee said his project has become a costly, dragging endeavor because of fines and regulatory hurdles by the city.

"The city made it a nightmare to buy a piece of property and fix it up," McGhee said.
He said city building inspectors criticize his work, continually add requests for more work to be done, and haven't been cooperative.

"They're just drawing money out of me," said McGhee, who works as an electrician and repairman. "It's getting ridiculous. ... They (city officials) make it impossible."

City officials say they have questioned the quality of McGhee's work but have remained cooperative. They say they are cooperative with all investors.

But Ronald Ball, a Parchment man who has invested in such properties, says fines, combined with high taxes and crime in the city of Kalamazoo, are causing him to shift his business of renovating and renting houses into the townships.

"I've been fined and fined and fined," said Ball, who has been renovating properties in Kalamazoo since 1973. "It made us stop buying in the city."

Ball said the city has gotten more stringent during the last three or four years with inspections and fines.

"I don't know where it's coming from," Ball said. "The inspectors are good guys; they know their stuff."

Launching the effort

The city's anti-blight team was born out of tragedy. In 2002, 10-year-old Ashley Joyce died in a fire. She was living in an apartment with no occupancy permit and boarded windows.

The apartment was lit by candle, and police and city officials were unaware anybody was living in the apartment, according to interviews with members of the anti-blight team and Gazette records.

In January 2003, the Kalamazoo City Commission adopted ordinance 1753, which defined an abandoned residential structure and outlined fees and penalties for owners of such structures.